Babci’s Rules of Personal Finance

Babci is a self taught personal finance guru. She has managed to live debt free for her entire life. In fact, she’s never even had a checking account, let alone a credit card or mortgage. I thought I’d share some of her most commonly dispensed financial advice. Enjoy.

Always pay cash for anything you purchase. If you don’t have the cash, you either need to work more or buy less.

Don’t buy something if you can grow it, sew it or pull it our of someone’s trash and fix it.

When you do need to buy something, try to find it used first.

If you have to buy something that’s new, it’s better to save up and buy a quality item than it is to buy the cheapest one available. For example, it’s better to have one pair of shoes that are comfortable and last vs 3 pairs of cheap shoes.

Restaurants are for stupid people who like to eat dirty food that’s been handled by filthy strangers and surrounded by roaches.

Vacations are for rich people.

The only acceptable hobbies are ones that are practical, mostly free and produce something useful in the end. (e.g. gardening, sewing, fishing, hunting, foraging)

Keep your door locked at all times.

Never tell anyone how much money you have.

Always save for a rainy day because you never know when your luck will run out.

Always work when a job is available. Work as much as you can while you are young because as you age, it gets harder to keep up the pace.

Never go to someone’s house empty handed.

Conserve all utilities.

Don’t help people who don’t want or aren’t ready for help.

No matter how poor you are, you always have something that you can give to a person in need.

I’ll elaborate below:

Always pay cash for anything you purchase. If you don’t have the cash you need to work more or buy less.

Babci loves America. You know why, because you can buy anything you want and there are plenty of jobs to pay for those things. Back in post WW2 Poland, even if you wanted to work, there was no way to get ahead. Yes, even in this crappy economy of ours, there are still minimum wage jobs to be had for those who want them.

The idea of borrowing money to pay for something was absolutely taboo to her. Even when she wanted to own a home, she rented for 10 years until she had enough money to pay for it with cash. I have had 2 mortgages and student loans but other than that, I try to follow this rule pretty closely.

Don’t buy something if you can grow it, sew it or pull it our of someone’s trash and fix it.

Babci grew up on a farm and it’s hard back breaking work, but to this day, she plants a garden every year. It is a way of life for her. Even when she was working 50 hours/week, she still managed to squeak a few hours here and there to keep her garden going.

Aside from gardening, everything else that she’s figured out how to do has been self taught through a lot of trial and error. We are so fortunate to have the internet. When we want to learn something new all we have to do is google it and hey presto, instant opportunity to be self sufficient. It was a lot harder for the Babcinator but she still managed. My husband and I are big do it yourselfers so I guess we did pick this trait up from our families who were both handy.

When you do need to buy something, try to find it used first.

Back before Craigslist and Ebay there were thrift stores, yard sales, flea markets and classified ads. Just about every Sunday in the summer when we had a car, we would go driving around to yard sales with the flea market as our final stop. There were a few years when I just wanted to stop the insanity because we had too much junk in the house. Now that I have young kids that are always growing in and out of toys, books and clothes, yard sales are back on the regularly scheduled summer agenda.

If you have to buy something that’s new, it’s better to save up and buy a quality item than it is to buy the cheapest one available.

The other part to this that Babci always says is “what’s cheap is expensive.” I live by this rule with everything except electronics (because they only last 3-5 years tops whether you buy the top of the line model or the bottom end). Since I absolutely hate buying stuff, I would much rather pay more for an item and know it will last vs buying something cheap that will fall apart in no time. The best personal example is my flannel sheets from LLBean that my husband turned me onto. We have 2 sets from 15 years that are still in use as we speak. At the same time, I spent $50 on a set from Macy’s that pilled so badly after 2 washings that I couldn’t bear to sleep on them after 1 season. Yes, the $100 ones are way more expensive but you know what, I absolutely got (and am still getting) my money’s worth out of them.

I’ve been noticing a trend that more and more companies are moving away from creating quality products, specifically for children. If anyone can find a lunchbox who’s zipper lasts more than 1 year, let me know. Despite my love of Christmas, the one thing I hate is how many crappy toys end up broken before the day is up. I hope more companies like Quadrilla are wildly successful are here to stay for the long run. (we have bought 3 of these marble runs so far).

Restaurants are for stupid people who like to eat dirty food that’s been handled by filthy strangers and surrounded by roaches.

I’m in sales so I eat out a lot and I guess I’m not squeamish, but I will share a couple of stories from my restaurant days in case you are trying to cut down your spending in this category. And don’t even get me started about tipping. Babci completely doesn’t understand the concept.

The first was when I was working in a fast food restaurant. I used to come in early and prep all the food before my shift started. One of the things I used to make was a big sheetpan full of meatballs. One day, I lost my balance as I was taking the tray out of the oven and I spilled the whole batch on the floor. I looked over at my boss in horror who was standing next to me because he was always harping on food costs (and I just cost him dearly). He paused for a moment and then told me to pick them up and use them.

In college, the restaurant I worked at was very trendy and hip. It wasn’t fine dining, but it was on the expensive side. I can confirm that it definitely had roaches but they weren’t the worst part of that place, it was the chef/manager. He was this fat walrus type guy with a big bald head and a thick mustache. He worked the grill and he would get all sweaty during his shift. He used to always have a dirty rag hanging off his apron for cleaning. His gag worthy offense was when he’d wipe his fat sweaty brow with this rag and then in the same swoop use it to wipe the counter that he was prepping people’s food on. By the end of the shift the rag was sopping wet and covered in food and grime. It was really gross. Another friend of mine said “Never EVER send food back to the chef.” I’ll leave it at that.

Vacations are for rich people.

Okay, I break this rule every year. I love to travel and it can be done on a budget, especially if you have a lot of friends all over the world. If you learn forex with everest or other such sites they will tell you its best to go on holiday where your currency is the strongest as it will go further. For years, the currency exchange rate was a big deciding factor of our final vacation destination. Going to a place like Thailand was a dream vacation and very affordable back when the dollar was strong.

The only acceptable hobbies are ones that are practical, mostly free and produce something useful in the end. (e.g. gardening, sewing, fishing, hunting, foraging)

When my cousins started skiing and my mom learned about how much the gear and lift tickets cost, she thought they had lost their minds. I have a variety of hobbies, but I have a good mix of sports/practical things I enjoy doing. In general though, I hate the pay as you go hobbies like golfing, skiing, etc. I’d rather buy a pair of snowshoes and go in the woods for free than fork over $75 for a lift ticket.

Keep your door locked at all times.

We lived in a bad neighborhood and the riff raff wandering the streets were not to be trusted, ever. It actually drives me nuts now because she still always has her door locked even if she’s just working out in the yard. My husband used to go crazy because I did the same thing with my car for years just out of habit.

Never tell anyone how much money you have.

Her belief was that if someone knows how much money you have, there are only three possible outcomes:

The person will be resentful that you have more money than they do.

The person will feel they are better than you.

The person will try to take it from you.

So sorry folks, there will never be any net worth updates on this site.

Always save for a rainy day because you never know when your luck will run out.

Babci grew up during world war 2. She was often hungry and cold growing up. She lived through decades of this and when things got better for her, she was paranoid about going back to that place of hunger and want. No material item is so important that it’s worth sacrificing the feeling of security that a few bucks in the bank offers.

Always work when a job is available. Work as much as you can while you are young because as you age, it gets harder to keep up the pace.

Babci was unskilled labor, with limited English language skills. She loved and appreciated the job she did have because for her, the options were very limited. I’d like to think I’m better off because I’m educated, can be mobile, and have a good resume, but I’m super paranoid about exiting the workforce. I’ve just heard too many stories of staying home for a few years essentially being career suicide. I worked hard and spent a lot of money to get my degree, so I really don’t want to waste it. Life’s not all about working though, so I’m still trying to figure out the best balance for our family.

Never go to someone’s house empty handed.

Aside from being polite and helpful to the host, it also increases your chances of a return invite.

Conserve all utilities.

Whenever I complain to my husband about how much more our utility bill is each month, he says to me: “It’s not fair comparing yourself to someone who spent the first half of her life without electricity or running water.” Babci always line dries her clothes and conserves electricity and energy like you wouldn’t believe. In fact, I had to put my foot down on all the 7 watt light bulbs she was using throughout the house because I could never see anything. We had a guy come to give an energy audit and he actually had no suggestions on how she could be doing more.

Don’t help people who don’t want or aren’t ready for help.

There is no worse feeling than taking time, money or effort out of your day to help someone in need just to find out that not only do they not appreciate what you did, but are resentful that you stepped into their lives to meddle.

No matter how poor you are, you always have something that you can give to a person in need.

Babci has a lifelong grudge against one of her sisters because she didn’t loan her a little money to buy some food during her trip to the US. Her sister offered her the equivalent of 10 cents (not even enough to buy a cup of coffee at the time) which she declined. She said if all you have is 10 cents, then you need it more than I do.

Her twin sister on the other hand would always share everything no matter how little it was but at the time she had no money or food to give. The evil sister lived to regret her decision because after that, she never got another thing from my mother, but the twin sister was repaid 1000 fold.

My mother is incredibly giving because she would have loved a helping hand in her darkest hours but few people did. I love the sense of community giving brings. I find that when I help others, I never EVER have a problem finding someone when I need a hand doing something. Even if you don’t have money or food, you still have time to give.

That is the end of my tale of Babci’s personal finance rules to live by. Although I don’t follow this list to a T, having her as a role model has really impacted how I deal with money and saving. I hope you get something out of it too.

I like Babci’s rules. Grow it, do it yourself, keep to yourself. I had a discussion with my son just last night when he asked how much money I made. I steered the discussion away from the question into a teaching moment, don’t tell anyone your business. As it turns out, he has a few friends from school that have told him how much their parents make and how they have money troubles…. (See?)

My mom and I know everything about each other’s finances. I’ve known since I started doing her taxes at 14. I don’t think people care as much when you’re broke, but when you have money, that’s when things get a little hairy about who should know what.

I love all the rules! Our family did similar things when I was growing up too.
We never ate out much. I remember going to Sizzler once a year or something like that.
We took vacations to national parks. This is pretty economical.

These rules are very similar to the way my grandparents thought about life and money. They could stretch a dollar further than anyone I’ve every known. They raised a family of five and paid cash for their first and only house during the Great Depression on a single income and never bought anything on credit. They were not rich, but were happy and content with their lives.

On a personal note, for #5– anyone who has worked in the kitchen of a restaurant would never eat at that restaurant…. and #8– I grew up in small town and don’t ever remember us locking any door in the house, even when we went on vacation for weeks at a time, don’t even think we knew where the keys were.

It’s nice that you never experienced crime growing up. Where I lived if you left something outside unlocked, it would instantly get stolen..in fact even if it was chained to something, it would often get swiped.

We lived in South Africa first, with a similar crime-filled environment. If you left your worn out kiddy’s bathing suit hanging out to dry in your yard overnight, it would be gone the next day, despite the 7 foot fence round the house.

Then we moved to a fairly rurual area of the US, with almost zero crime. My parents still get antsy about holding your handbag a safe way, etc, but we also never know where our house keys are!

I love all of the rules! The ones about money and about helping people not ready or able to accept your help especially resonate with me, but they are all great. I don’t think I would go to the same lengths everywhere, though; for example, I’d rather be warm and comfortable than live in a cold house, even if I save $50 a month in electricity doing so. I value the comfort at least that much. Still, I think lots of people could learn from this advice, though I can’t say I’m too happy about reading the one about the restaurant. Will make me think twice the next time I feel like going out somewhere to eat!

Interesting you said that. Babci never skimps on her heating bill (although usually she heats her kitchen and leaves the other rooms cold). She’s one of those old ladies that keeps her kitchen uncomfortably warm. She also doesn’t skimp on food. Those are two things she really really hated not having, so those would be the last to get cut from her budget. ON the restaurant thing, ignorance is bliss.

Can’t say I do or will do all the rules but they mostly seem logical. My mother also always kept all doors locked… and I still do that! It drives my family crazy sometimes. And, I was thinking about a Tim Horton’s soup for lunch, not sure I will anymore!

What a nice, reflective post. Lots of wisdom here. I have to say, based on all I have read here, that Babci seems like a person who is wise to the ways of the world and understands the value of being an independent, self-sufficient, fair person.

Many rules above are in alignment with my beliefs, thought I don’t always have the resolute discipline like she seems to have. Anyway, the ones that resonate the most with me are:

1) Here, I look at “cash” as credit card purchases that you absolutely pay off immediately upon receipt of your statement and never carry balances or pay late. In other words, if you have to borrow for it, don’t buy it. I do agree with that. For a home, I reluctantly make an exception.

8) I wish this wasn’t the case, but keep your door locked, absolutely.

9) I’m confilicted here, because I really like transparency in life. That said, I think that I just can’t go against her advice on privacy when it comes to salaries and assets. Those are specific areas that are a struggle for me to discuss with people, despite my overall belief in being open and transparent.

10) and 11) Save for a rainy day, and work when you’re younger – Yes, yes, and double yes to these.

15) We can all give, in our different ways. Humility and generosity don’t necessarily require money.

That’s how I look at “cash” too. Ie, buying something without paying interest on it. I keep changing my mind on 11. I started babysitting at 11 and worked every weekend through college, then worked non-stop since then (with the exception of maternity leave). I really don’t want to get burnt out and miss out on stuff.

Babci would hate me. Oh well, she’s cool anyway. Here’s how I break down according to her rules though:

1. We use credit for everything and pay it off at the end of the period every time for the rewards. I think we are living up to the spirit of the rule though (except for our mortgage and two car loans we just paid off).
2. I buy new all the time because I am lazy.
3. See lazy above.
4. I totally agree that quality beats cheapness.
5. I love eating out and I am not squeamish.
6. We take 2-3 vacations a year.
7. None of my husband’s hobbies are practical except for reffing and none of mine are unless she considers blogging to be practical…
8. I do keep our house doors all locked all the time. Habit from college.
9. I post net worth updates and blogging income updates to keep myself motivated.
10. “Always save for a rainy day because you never know when your luck will run out.” ABSOLUTELY
11. Nah. As soon as we can afford it, we will quit and only work as we want.
12. “Never go to someone’s house empty handed.” I would add “the first time”. After I become friends with someone, we’d both go broke if we brought something every time, lol.
13. Conserve all utilities…unless you really need a hot bath…
14. “Don’t help people who don’t want or aren’t ready for help.” Great point.
15. “No matter how poor you are, you always have something that you can give to a person in need.” I agree 100%.

I’m pretty sure she’d like you. I like your line by line comparison. You’re right about 12. I don’t follow that rule as strongly for people I see all the time. Plus, you’re good on the most important items…like having some money in the bank and not buying stuff you can’t afford. These rules were based out of necessity. I’m sure if she were making a lot more, she would have ditched some of these rules earlier.

Well… sounds like my grandmother. You post brought up some nostalgia in me. My grandma still lives in Lithuania (hey, neighbor :-)), so understandably they both have a lot in common. Locking doors thing – I still lock doors EVERYWHERE. I’ve been told that I am too paranoid. Come on… I can tell you stories from my past about what happens when you don’t lock doors. Great post! Love babci!

My process is usually.
1. Try to find it at a tag sale (not always possible if you need something quickly).
2. Try to find it on Craigslist. if that doesn’t work,
3. Try to find it online and shop around.

The other thing about buying used is that I can usually resell the item for the same amount or more than I bought it when I’m done, so if I bought something impulsively that I don’t need, it’s easy to dump it again without losing money.

Awesome list! My favorites were “Vacations are for rich people.” (which I also break every year), “Keep your door locked at all times.” (drives my wife nuts as well), and “Don’t help people who don’t want or aren’t ready for help.” (i.e. mind your own damn business.).

WooHoo, the non-internet Wojo in my life is going to be wondering who the heck is this imposter. You look a little younger than him, so maybe he’ll claim that he’s the original wojo.

I definitely think there are some cultural things like the door locking thing that comes from the communist era mentality that the only way to get ahead is to beg, borrow, or steal from someone else, so no one is to be trusted.

Yes, it’s good to find a polish blogger that’s not a spammer or article plagiarizer.

Rule number 2 is one of the best I have ever heard! It is a bit old fashioned (like the other rules from the list), but it’s also brilliant.
Best regards from Belgrade (Serbia) for you and your family!

Love that Babci! This is a fantastic post.
I bet if everyone knew what on ‘behind the scenes’ at restaurants, nobody would eat out ever again.

I won’t post net worth updates either as too many people I know read my blog. I love vacations and I am not rich. However, I get so much joy out of seeing new place and traveling with the family that I cannot imagine giving it up. As a matter of fact, it is what I ‘work’ for. If I didn’t spend on travel, there wouldn’t be as much reason to save.

Yes! My 13 year-old son, God love him, is in that stage right now where he is not at all interested in getting any personal finance advice from his dad regarding his spending habits. Fine. So I am letting him regularly fail in that regard. There is nothing like the school of hard knocks to drive home a lesson or two, and better he make his mistakes now while the damage done will be relatively minor.

Ah yes, the know it all stage. I distinctly remember thinking my parents were idiots about that time. It’s just now in my 30’s that I realize that there was actually a reason behind all the ridiculous things my mom would tell me.

I think that the locking your doors thing is sensible, and that you should never get too complacent. Basically, it’s an easy way to lower risk! I would extend this to things people do like – leave the car running while they run into the store to grab something quickly! I saw this more when I was younger, but at convenience stores, people would just leave an empty car running – just begging for a teenager to grab it and go!

Kellen – You know, good tip on the running car thing. Babci doesn’t have any car tips because she never had a car. She regrets never getting her license though. It was a form of control my dad had over her and she still resents it.

Everyday Tips and Ken – Yup, I caught the vacation bug when I lived overseas for a year. It was life changing and it will always be a priority. I like to go to new places too, so I won’t be one of those people who go to florida every year. I can’t wait til my kids get old enough to go to the exotic places again. Any place that requires nasty shots is off limits for now.

Doctor Stock – I like cash too. Not having money to pay for things I want/need majorly stresses me out.

Barb – I’m with you on waste. I personally think it’s a good week if I have 1 bag of trash or less. The holiday trash makes me sad because there is so much packaging being thrown out.

Really enjoyed this. It reminded me of my grandmother who grew up in the depression. I follow most of these myself, some a lot more than others. For instance the sharing money info point: Even my parents have no idea how much money I make, only my wife knows. And she doesn’t really care as long as I’m happy. I don’t like it when people share figures with me… makes me uncomfortable. I guess mainly because I think they want me to reciprocate, and I just don’t feel it’s safe or wise to do so (especially with friends).
Sandy- I loved your comment about hobbies. My favorite new hobby that I picked up in New England was hiking. Talk about a cheap, thrilling hobby. I actually have a friend who was very critical of me, because I don’t have “an expensive hobby”. He thinks I’m living some poor monk’s life of denial or something, I don’t know. Skiing IS ludicrous, as are people who are WAY into photography… I guess at least they get nice pictures out of it though. I told him my expensive hobbies are travel and good beer. Really that’s all I need.
I do disagree with your comments about electronics. I have always bought above average electronics and felt very good about the value I’ve gotten out of them (I have some stuff that is over 10 years old for example). I’m only nervous about the 42 in LCD I bought. I paid good money for a quality TV, but I just don’t trust new LCDs. If it lasts five years I’ll be thrilled (my wife won’t though!).

Gavin – You can even do expensive hobbies for free. Around here we have ski mountains close by with night skiing. Quite a few of my friends volunteer as ski patrolers so they and their families can ski free for the season. You even get a jacket. I really hate buying electronics. It stinks that they don’t last longer.

Mickey, thanks once again for the inspiration: to use stamps as silhouettes! Don’t worry, Russ will get his heart right for ya! (I’m an ex-cardiac nurse) Something will work, and they won’t stop until they find what works!

I agree with “No matter how poor you are, you always have something that you can give to a person in need.” I prefer to have family donate money to charity (or volunteer) at Christmas rather than give me presents — whether I am strapped for cash that year or not, I know there is someone out there who needs that money more than I do.

Reminds me a lot of my upbringing, I was just thinking about how much my parents have “loosened up” since I was a kid. I think Babci’s upbringing was much harsher and thus much more ingrained into her being. In a world where money is very hard to come by, you learn to respect it while also learning about what other things are really valuable like relationships and respect.

Jonathan – the doily thing makes complete sense. It’s a way to cover up crappy, scratched and stained furniture. Babci has also loosened up. She has no problems spending money on certain things now because she knows we have it.

This is a gooooooood set of advice. I mean some of it I don’t agree with. But overall it’s such a great resource. The one about the restaurants is a wake up call for me. I’ve been eating out a lot, it wastes my money and god know what my food went through. Fantastic advice!